Wall Street slide continues

  • Associated Press
  • Friday, July 23, 2004 9:00pm
  • Business

NEW YORK – Wall Street skidded further Friday, sending the Dow Jones industrials back below 10,000 as disappointments from Microsoft Corp. and Amazon.com Inc. deepened investors’ dread of a second-half earnings slump.

All three indexes ended the week lower for the fourth straight week, as investors sold stocks across all sectors and industries, with technology and consumer staples taking the brunt of the sell-off. The tech-heavy Nasdaq composite index fell to its lowest point of the year.

The drop was triggered by lower-than-expected earnings from Microsoft – a rare miss that unnerved investors. And Wall Street saw Amazon.com’s lower-than-expected earnings and revenues as a potential sign that consumer spending was slowing.

Combined with economic data that has pointed to what Federal Reserve Chairman Alan Greenspan called a “soft spot” in the economic recovery, the week was a brutal one throughout the markets.

“You take the economic data over the last few weeks, which has been disappointing, and now all these negative earnings outlooks, and then you add in all the worries about energy prices, terrorism, Iraq, the elections – there’s a lot to worry about out there,” said Michael Sheldon, chief market strategist at Spencer Clarke LLC. “It’s going to take a while for these issues to be resolved, and I think we’ll be stuck moving sideways to lower until then.”

The Dow Jones industrial average fell 88.11, or 0.9 percent, to 9,962.22. It was the first time the Dow closed below 10,000 since May 24.

Broader stock indicators were also sharply lower. The Nasdaq composite index dropped 39.97, or 2.1 percent, to 1,849.09, its lowest closing level in 2004. The Nasdaq is now 7.7 percent lower for the year.

The market has been sinking steadily since early July, when a disappointing jobs report from the Labor Department ended hopes for a summer rally and also started giving investors doubts about the strength of the economy.

Since then, other downbeat economic data and a series of surprisingly poor second-half earnings outlooks have taken the market lower and lower, although the majority of second-quarter results have surpassed estimates.

Still, many analysts noted Friday that with the major indexes near or below their year-to-date lows, the market has nonetheless managed to find a discernable bottom, and most expected the major indexes to trade in this lower range until enough time passes to assuage at least some of investors’ fears.

“We have to get past some of these milestones on the calendar – the conventions, the Olympics, the Fed meeting on Aug. 10, even the elections – and we have to get through them unscathed,” said Jeff Kleintop, chief investment strategist for PNC Financial Services Group.

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